Has CA Turned The Corner?
As CA World wrapped up Tuesday evening in Las Vegas, CA shareholders, channel partners and customers had a lot to chew on -- much of it positive.
Goldman Sachs issued a neutral but encouraging investment report based on its analyst's attendance at the event. Perhaps the most interesting statement was one of omission: Not a single direct mention of CA's scandal-plagued recent history.
"While we are comfortable with our current 12-month [CA share] price target of $29 based on our current cash flow estimates, we believe that ongoing cost reductions could ultimately exceed our estimates," reported Goldman Sachs.
Meanwhile, channel partners got a big-time promise from CA. The Islandia, N.Y.-based software maker on Monday announced the formation of a midmarket-focused business unit that the company said will sell its new recovery management product exclusively through the channel.
CA Recovery Management integrates the vendor's ArcServ backup and recovery technology with the real-time continuous data protection (CDP) technologyt that CA obtained via its acquisition of XOsoft. The new product will be sold through the channel to companies with 500 to 5,000 employees and annual revenue of $100 million to $1 billion, said Bill Lipsin, senior vice president of worldwide channels.
With some 650 employees working exclusively in CA's channel program, Lipsin said the vendor plans to narrow and strengthen its activities with VARs.
"In the next year, we're going to be working with fewer [channel] partners -- though that doesn't mean we're necessarily going to be dropping existing partners -- to achieve joint investments for better returns, working together in selective partner programs and working together with joint go-to-market plans," Lipsin said about CA's overall channel strategy.
"The CA legacy is direct sales, and we haven't had major penetration in the midmarket integrator space," he said, pledging to change that "with our recovery management products, by enhancing our current products and looking to make acquisitions" in the coming months.
Goldman Sachs also predicted a "potentially aggressive" return for CA to the mergers-and-acquisitions market. "We view CA as a beneficiary of the theme of vendor consolidation and believe the company is likely to remain acquisitive to capitalize on this positioning in the IT management space," the investment firm said.
For CA World attendees, the message from the vendor was threefold: Reduce the complexity of IT, adopt a service-oriented model and align technology management with overall business strategies.
CEO John Swainson kicked off CA World in his keynote with a challenge to make IT management simpler. On the final day of the conference, CTO Al Nugent got more granular in describing just how to do that, stressing the development of a services-oriented architecture (SOA) that is governed by business-level policy and can manage complex, composite identities for devices, users, applications and more.
The upshot of all this for the channel and beyond is that CA appears to be headed back in the right direction in terms of transparency, as a channel partner and toward a long-awaited return to IT innovation.
Of course, that doesn't mean industry observers won't be watching the company with wary eyes. As one ChannelWeb reader said in a posted comment on a CRN story about Swainson's keynote, "Actions speak louder than words."